DAIRY Crest warned that prices will jump yesterday as it posted a five per cent rise in annual profits.
The group, which makes Cathedral City cheese, Clover spread and Country Life butter, said higher costs and a poor spring for UK milk production will put pressure on prices.
Dairy Crest reported profits of £83.5m for the year to 31 March, up from £79.5m a year earlier.
Sales of the firm’s main brands, which also include Frijj milkshakes and St Hubert Omega 3 and Clover spreads, were up nine per cent.
Dairy Crest said it had introduced initiatives which would generate cost savings of £20m a year, ranging from appointing a new media-buying agency to redesigning its spread tubs to driving efficiencies in its dairies and distribution depots.
The company is paying a final dividend of 13.6p, up five per cent.
Dairy Crest chief executive Mark Allen said prices could rise.
He added: “That’s a matter for the retailers. But if milk prices started to move up, we would look to recover those.”
The results from Dairy Crest, which has 1,350 dairy farmer suppliers, came after a major marketing push to promote five top-selling brands.
They include Cathedral City, Country Life, Clover and Frijj milkshake. Sales of leading brands went up by 13 per cent, the company revealed in yesterday’s figures.